Yup. that’s me!
it’s really unfortunate to know that you sold your blue Accord already… :tantrum:
I see.
this also completely make sense.
This is also why I am not planning to buy my real brand new with finance. This next car, supposedly will be my only car until I buy a brand new…perhaps SUV in the next 3-4 years.
Does it also make sense…that…I am planning to do this financing to build my credit history?
I owned several credit cards for about 6 years now. However, I never put myself in debt. I always paid the card in full each month.
Now I begin to wonder…If I never finance anything, what will happen when I try to finance bigger thing like a $200,000 house?
What will happen if I never build a relationship with any credit/lending entity? Who will trust me when I plan to build or buy a house?
…
With that in mind, I plan to finance my next (pre-owned) car with big down payment up front. Therefore, I probably will only finance around $5-6Kish for about 36-48 months…
TECHNICALLY speaking…I do have that amount of money in my savings, lol. So…I can actually pay everything up front…it’s just…I want to try to finance something, ya know?
keep in mind with a 5 year car loan on a $20,000 principal, (i know you are putting down a large DP) you end up paying over 4k in interest.
on a $200,000 loan at 8% for 30 years (a.k.a. a house) you end up paying over 200k in interest.
just think of what you could do with that extra money. Also I believe that a mortgage, especially your first mortgage is based more heavily on your income to debt ratio and the fact that they can repo your house if you default. (although this may have changed now that the housing market is in a slump)
yeah, basically they are saying “I will give you a $20,000 car today if you pay me $24,000 over 5 years, and I’ll build your credit”
sounds like a good deal to me.
Financing a used car is a bad way to get started in this field. Especially if you have the money in your savings account. With a new car, you can often get promotional financing rates, and it makes sense. You’ll likely have to pay 7% or so on financing a used car, while the money sitting in your savings account is only earning you 1 or 2%.
On time payments will help you marginally, but that generally isn’t the type of debt that creditors particularly like to see that would really build you up. I would say pay cash for this if at all possible, keep it, and finance when you’re ready to buy new.
Thanks a lot guys for your inputs. This is definitely a new experience for me.
Keep it coming… 
I wonder…what will my interest rate for me right now…
Like you said, if buying a new car with promotional financing rates, how good it really is?
Can you give me an example?
Interesting point of view. However, I still do not see the logical differences between financing a brand new car and a used car. Isn’t it possible that I get the same financing rate for both new and used car?
Also, talking about buying a new car…there’s a big topic in my mind:
- Buying new car
or - Leasing new car
The things i know in general:
- you sould buy a new car if you plan to keep it in long term…
One thing i analyze about leasing:
- Let’s say i am planning to lease about 3 years. In that period of time, technically speaking, the car will be FULLY warranted, right (3 years/36K miles)? Doesn’t that mean that I don’t have to worry anything at all about anything breaking down for 3 years? Then, after 3 years, “it’s time to switch.”
yes except tires, brakes and you also have to make a claim on your insurance if lets say someone pulls a hit and run on you in a parking lot (or pay their inflated scratch/dent repair fees at check in time.) also its standard to charge 20-30 cents for every mile over the mileage limit you chose.
but at the same time lease payments are often based on residual value when you give up the lease making some cars “lease better” than others.
I used to work at northtown TVS and I looked into leasing both a corrola and a jetta V for my girlfriend. the jetta, even a SE with all the options was still cheaper to lease for the same term and mileage than a $3k less sticker corolla.
Says the guy who can fix his own car.
If you can’t fix it yourself a lot of times you’re better off getting a newer car and making payments than paying to fix some POS you’re driving while you try to “save” money. I’d much rather pay a little in interest to a bank who builds my credit rating in the process than pay to put my mechanic’s kid through college while he fixes my POS every couple months.
As for credit unions, make sure you don’t just assume their rates are going to be that great. I work for a company that writes the software over 600 credit unions use and see a lot of customer data. Very rarely have I seen loan rates that beat what I got through Capital One. When I bought the GTO I called several CU’s and they couldn’t beat my Capital One rate. There are lots of factors in determining that rate though so each situation is different. Bottom line, you have to who will offer you the best rate.
This is very vague, and not accurate in all situations, but the shorter you plan on keeping a car, and the higher the depreciation on that particular model, the better it is to lease. If you want a Civic, and keep it for 5 years, buy it. If you want to buy a G6 and keep it for 3, lease it. Leased cars come with the same warranty as buying that model new, so if a car comes with a 3 year warrranty, then yeah, everything that could break is covered. You just worry about oil changes and tires pretty much.
ding ding ding
took me ~ 3 years to dig out of it, but now that I am it is a weight off my shoulders…
Though at this point in my life I will finance a new car, I just made sure to save up some $$$ this time to put down so that within a few months I am ahead as far as equity goes :tup:
If you’re going to lease you better REALLY do your homework. I’ve seen way too many friends, even friends that know the traditional tricks car dealers use to boost profit, get screwed in their lease contract. Not saying leasing is always a bad idea, just warning that there are lots of ways for dealers to make extra money in the small print.
^ugh. yup. indeed. that’s definitely going to be a big homework for me when I consider to buy a new car.
btw, I am planning to buy Honda CR-V (brand new) in the future. is this car a good candidate for leasing or buying? as far as how long i keep it…this is quite a tough question. so far, the longest time i kept my (used) car is 2 years. somehow, i have a desire to change car afterward…i feel like my car is “wearing out”…even though nothing wrong happened.
obviously, in 2-3 years time, my behavior should change for the better.
still though, im puzzled whether to buy and use a car to 3-4 years…or just lease it for 3 years?
again, im planning to buy a brand new Honda, that is a CR-V…or possibly Toyota RAV-4.
indeed.
however, how about if i want a CR-V (a Honda) and keep it for 3 years?